Are you interested in increasing your sales and revenue produced online or in your store? By offering your customer new financing options, you can accomplish this goal. A recent study by PayPal showed that the average size of purchase orders increased by 15% when small businesses started offering customer financing. In addition, over 90% of customers who used consumer credit services said they plan to do so again.
Don’t miss out on this increased business by not offering financing to your customers. If you’re ready to take the next step and grow your bottom line, here is your complete guide to customer financing. Follow the steps and take the time to do the research to ensure a successful customer-small business relationship.
How Customer Financing Works
Customer financing entices browsers to become buyers by offering affordable payment options for purchases. It allows customers to apply and be approved for more affordable monthly payment options instead of paying for the entire purchase up-front. Even high risk merchants can offer this service – they just need the right company to provide the resources (I.e., FAM).
Offering customer financing is not a complicated process and can easy be done whether you choose to handle the financing in-house or outsource it to a financing company. Here are the steps for how the customer financing process works.
- A customer browses through your online store
- After seeing something they like, they’ll decide whether or not to purchase an item
- The customer applies for financing directly from their computer, mobile phone or tablet
- In just a few seconds they will find out if they are approved
- You provide the customer with financing and charge an interest rate
- The customer is happy with their purchase and begins to make monthly payments
The great part of about financing is that you don’t need complicated software or special hardware to offer this to your customers. In addition, you’re able to make more sales while your customer leaves your store satisfied.
The Benefits of Customer Financing
There are many awesome benefits to offering financing options to your customers. If you’re on the fence about whether or not this added service will work for you, read on.
1. More Sales
Offering customer financing is a great way to increase the average size of orders and drive more sales. More payment options mean that browsers will become buyers because they can more easily afford the purchase.
2. Up-front Payment
Your customers will have to pay off their purchases over a period of months but your business will receive revenue up-front. You’ll get paid right away without having to wait to receive the revenue and this means better cash flow and money management for your business.
3. Happier Customers
The more payment options you give customers the more likely they’ll be to press the “buy” button. Instead of having to search for more affordable payment options somewhere else, they’ll be satisfied with their purchases and go home happy customers.